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Tuesday, October 3, 2006

Hawai’i Supreme Court Enforces Non-Compete

The Supreme Court of Hawai’i recently enforced a non-compete agreement and upheld an order enjoining an employee from working as a “briefer” in the State of Hawai’i for a period of three years. (A “briefer” is “primarily hired to promote and sell products from its shop and to sell optional tours and souvenir items” to travel agencies with which the plaintiff/employer had contracted. There are only three briefing companies in Hawai’i.).

The court held that:

(1) training that provides skills beyond those of a general nature may be considered in weighing the reasonableness of a non-competition covenant . . ., when such training is combined with trade secrets, confidential information, or special customer relationships weighing in favor of a protectable business interest, (2) the finding by the circuit court. . . that the training of a briefer such as [the employee] is "unique" was not clearly erroneous in light of the evidence in the record, (3) under the circumstances of this case, the court did not abuse its discretion in ruling that the reduction in [the employee’s] salary by [the employer] did not amount to "unclean hands," (4) the court did not err in ruling that [the employee] suffered irreparable harm from [the employer’s] continued work as a briefer following her resignation, and (5) the court did not err in concluding that the three-year non-competition period was reasonable.

The 7’s Enterprises, Inc. v. Del Rosario, __ P.2d __, 2006 WL 2620637 (Hawai’i Sept. 13, 2006).

[Meredith R. Miller]

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